Diese Aktien in 2004 bitte beachten

Silicon Graphics. Computer maker Silicon Graphics (SGI: news, chart, profile) is about four years into a turnaround under CEO Bob Bishop. Aside from its recently raised quarterly expectations, SGI swapped debt that would have been due this year for debt due to mature in 2009, giving management some breathing room -- and a chance to work on boosting sales of the company's high-margin Altix Linux-based supercomputer systems -- products its competition doesn't have.

Few would deny that Silicon Graphics shares are cheap. Even after its 13 percent gain Friday, the stock still trades at less than 0.5 times sales -- among the cheapest tech stocks out there by that measure. It's true that SGI shares has languished for a long time, but this could be the year that shares move, due to a strong Linux-based product lineup that may be of particular interest to government customers.



On Semiconductor. A recovery in the chip sector seems likely to continue in the coming months, driving semiconductor issues even higher. One chip stock that's cheap on a price-to-sales basis is On Semiconductor (ONNN: news, chart, profile), which makes a broad range of power-management chips, as well as components used in everything from cell phones to computer routers.

A few insiders have been quietly picking up On Semiconductor's shares in recent months -- a possible sign that the company's turnaround is gaining steam. Management has cut almost half a billion in operating costs in 2003. Additional cost cuts are possible. And although long-term debt of nearly $1.3 billion remains a big concern, potential increases in operating margin due to pricing power seems likely -- a factor that could drive On's shares.

Iona Technologies. Iona (IONA: news, chart, profile) shares have more than doubled since October, and there's reason to think the company's product-driven stock run could continue. Iona launched a new product set in October called Artix that already has shown sales promise. It links various types of integration software products companies already have purchased.

Another potential sales driver is a services agreement Iona reached with JBoss Group, privately held maker of Java-based application-server software that can be downloaded of the Web for free. In conjunction with Iona, JBoss offers a lower-cost alternative to the software IBM and BEA Systems sells for linking data with many different types of corporate applications. JBoss makes money by selling services for setting up its software and making it run more easily. A person familiar with the matter said it is "very likely" Iona will announce its first deals to provide implementation services for JBoss customers when Iona reports first-quarter results Jan. 21. See full story.



PalmOne. After two years of declines, sales of hand-held computers may be positioned for an increase in 2004. The ones in greatest demand are the high-margin "smart phones" like the PalmOne (PLMO: news, chart, profile) Treo 600 -- an organizer and cell phone in one. Management says the Treo could become half of PalmOne's total sales in 12 months -- up from 25 to 30 percent of sales now. And PalmOne expects Treo to be carried by four or five new wireless telecom carriers this year, including T-Mobile. The more carriers PalmOne signs, the easier it is for customers to keep their current carrier when they switch to a smart phone.

Meanwhile, the price shareholders pay for PalmOne's intellectual property seems low. The stock trades at 0.3 times enterprise value-to-sales. By comparison, most hardware makers trade at multiple of 1 times sales, and rival Research in Motion trades at more than 5 times EV to sales.

Rambus. OK, this one is very speculative. The chip-design provider's stock is a wild child -- a volatile stock that's ridiculously overvalued based on current estimates. But there's reason to think the current estimates don't take into account Rambus' (RMBS: news, chart, profile) full sales and earnings potential in 2005, in the event the company has a few more good days in court this year. The outcome of the FTC suit is expected in February. This week, the company also got the OK to continue its suit vs. chipmaker Infineon Technologies. See full story.

Rambus is likely to prevail in a lawsuit brought by the FTC for alleged anticompetitive behavior in a standards-setting group, according to Erach Desai, an analyst with American Technology Research. The suit has been hanging over Rambus' head for years. Partly for that reason, Desai raised his 12-month price target on Rambus shares to $47, up from $35, and "enthusiastically" reiterated his buy rating. See full story.

Stocks with possible downside



Sirius Satellite. Although its stock has risen more than 40 percent the past two weeks and could rise even more this year, there could be a point in 2004 when money-losing Sirius (SIRI: news, chart, profile) runs into serious problems. Wall Street may conclude it's not worth paying 50 times next year's earnings to own the high-flying company.

For all that's gone right with Sirius -- the company's subscriber growth was 772 percent in 2003, and could be more than 200 percent in 2004 -- Sirius must cut costs quickly. At the end of its most recently reported quarter, Sirius spent $522 to acquire each new subscriber. Unless that cost drops, it could take more than 10 years until Sirius subscribers pay for themselves, assuming the company could eventually garner gross margins of about 40 percent (the company's gross margins are currently negative). A monthly churn rate of just 1.5 percent means that Sirius subscribers would only stay with the company for just a little more than 5 1/2 years.



OmniVision Technologies. The cell-phone camera market was arguably the strongest technology growth sector of 2003. Few companies benefited from the trend more than OmniVision (OVTI: news, chart, profile), a maker of chips that power the cameras. Growth rates were fueled as service companies offered special deals or gave away camera phones with new contracts. That's expected to continue for most of 2004; analysts are expecting tremendous first-quarter sales.

But at some point this year, other large chipmakers including Micron Technology (MU: news, chart, profile) could enter the camera-chip market, eroding OmniVision's margins. If that happens, OmniVision may be forced to trim its lofty growth estimates.



Siebel Systems. A lot of analysts were writing last fall that application software companies like Siebel (SEBL: news, chart, profile) would rally in early 2004, catching up with the strong performance of many infrastructure software makers. Guess what? They were right. But it started happening in the last months of 2003.

Now, Siebel is trading at about 55 times next year's earnings -- a level the stock hasn't reached since late 2001, according to Bernstein Research. Analysts expect the company to double earnings this year -- a goal the company might not reach, due partly to low-priced competition from the likes of Amdocs (DOX: news, chart, profile) and Salesforce.com. To justify its valuation, Siebel will have to achieve some big customer deals in 2004. While that could happen, there's little evidence that license revenue is on track for a big improvement so far.

Mike Tarsala is a San Francisco-based reporter for CBS.MarketWatch.com.

First SecurityFed Financial (FSFF: news, chart, profile) added more than 9 percent after the company agreed to be acquired by MB Financial (MBFI: news, chart, profile), for a combination of cash and stock valued at $139.2 million, or $35.25 per share. The addition of First SecurityFed, which had reported assets of $490.8 million as of Sep. 30, 2003, will increase the total assets of MB Financial to more than $4.8 billion.

Foot Locker (FL: news, chart, profile) gained more than 4 percent after the company said it now expects fourth-quarter earnings from continuing operations of 41 to 45 cents per share. The New York specialty athletic retailer anticipates same-store sales for the period will rise between 4 and 6 percent, at the high end of its previous expectations. The average estimate of 12 analysts polled by Thomson First Call is for earnings of 43 cents per share in the January period.

JMAR Technologies (JMAR: news, chart, profile) rose more than 12 percent after the company received $3.5 million in financing from the Laurus Fund, a New York-based equity fund. The deal involves the sale to Laurus of $2 million in 8 percent series D convertible preferred stock, and $1.5 million in 8 percent series E convertible preferred stock and warrants to purchase 290,000 shares of common stock. The San Diego-based chip capital equipment firm plans to use the funds to pay off $1.2 million in debt due in February, and for working capital.

LCA-Vision (LCAV: news, chart, profile) surged more than 6 percent after the company said it expects 2004 EPS of 80-to-85 cents vs. 80 cents expected by Wall Street in a survey of analysts by Thomson First Call. The EPS figure would represent a jump of about 50 percent over 2003 levels. The Cincinnati-based laser vision surgery specialist pegged 2004 revenue at $110 million and said it expects to open up to eight vision centers in 2004.

Shares of MAIR Holdings (MAIR: news, chart, profile) surged more than 11 percent after the company, which controls regional carrier Mesaba Airlines, reached a tentative agreement on a new contract with its 844 pilots. See full story.

MGIC Investment (MTG: news, chart, profile) leapt more than 7 percent after the company reported fourth-quarter net income of $103.9 million, or $1.05 a share, down from $1.37 a share in the year-earlier period, as higher paid and incurred losses offset record new insurance written. The results exceeded the average analyst estimate of 94 cents a share, according to Reuters Research. Total revenue increased 8.1 percent to $449.3 million, above analyst forecasts of $442.7 million, boosted by a 13 percent increase in net premiums.

Orthovita (VITA: news, chart, profile) shares rose more than 43 percent after the company received 510 (k) clearance to market its Vitoss Scaffold Foam bone graft material from the Food and Drug Administration. The product is based upon Orthovita's proprietary technology and Kensey Nash's (KNSY: news, chart, profile) resorbable biomaterials technology.

Silicon Graphics (SGI: news, chart, profile) surged more than 18 percent in early action. The 3-D graphics developer was up as much as 18 percent at an 18-month high of $2.80 earlier in the session, which was 104 percent above where it closed 2003. The company said before the opening bell that it released a Linux-based operating system server, powered by Intel processors. Last Thursday, the company had said that fiscal second-quarter revenue would be near the high end of its previously provided range of expectations.

Triad Hospitals (TRI: news, chart, profile) added more than 3 percent after the company said fourth-quarter earnings from continuing operations to be 14 to 16 cents a share. Excluding costs related to a refinancing deal, the company expects earnings of 47 to 49 cents a share, vs. the average analyst estimate compiled by Thomson First Call of 47 cents. For 2004, the hospital operator expects to earn $2.28 to $2.36 a share on revenue of $4.3 billion to $4.5 billion, surrounding average analyst expectations of $2.31 a share and $4.38 billion, respectively.

United Natural Foods (UNFI: news, chart, profile) rose more than 7 percent after the company said it expects 2004 EPS of $1.42-to-1.48 per share vs. $1.46 expected by Wall Street. The company also said it won a five-year distribution contract with the Wild Oats (OATS: news, chart, profile) in a move to boost revenue above estimates.

WestPoint Stevens (WSPT: news, chart, profile) gained more than 11 percent after the textile manufacturer said late Friday it plans to close four factories in Georgia, Alabama and Louisiana. Expenses for the closures were included in a charge taken in the third quarter of 2003, the company said.

Decliners

Adecco (ADO: news, chart, profile) plunged more than 40 percent after the Swiss staffing firm said it will not be able to release an audit of its 2003 full year accounts by Feb. 4 after finding "material weaknesses in internal controls" in its North American operations. The company said it had to resolve possible accounting, control and compliance issues without detailing them. The company said it appointed an independent counsel to conduct an investigation, and was not yet able to predict when the 2003 audit will be completed.

Shares of Computer Associates (CA: news, chart, profile) slid about 2 percent after the software giant said it was informed that the U.S. Securities and Exchange Commission may recommend a civil injunction against the company related to improper accounting. The "Wells Notice" relates to the premature recognition of revenue from software license contracts during fiscal 2000.

Countrywide Financial (CFC: news, chart, profile) gave back nearly 2 percent after the company tightened its fiscal 2003 outlook to earnings of $12.30 to $12.45 per share, post split, and reaffirmed its projection for a profit of $9 to $12 per share, post split, for fiscal 2004. The current average views of analysts polled by Thomson First Call are for earnings of $13.06 and $10.25 per share for the respective periods. The Calabasas, Calif., financial services firm added that total loan fundings reached $25 billion in December, and that as of Dec. 31, its servicing portfolio stood at $645 billion, up from $192 billion at the same point last year.

GenCorp (GY: news, chart, profile) fell more than 6 percent after the company said it plans to sell $100 million in convertible fixed rate subordinated notes through a private placement. The deal includes an over-allotment option for the sale of an additional $25 million in notes. The Sacramento, Calif., auto and aerospace parts firm plans to use the proceeds from the offering to repay outstanding debt, pre-pay payments of a term loan, and for general corporate purposes.

Greenbriar (GBR: news, chart, profile) lost more than 18 percent to $4.40 after the company, which operates care centers for the elderly, said Saturday that the Internal Revenue Service sent a notice of possible tax penalties. The company said tax-free revenue bond transactions in 1991 and 1992 for the purchase of four Georgia hospitals were under scrutiny. Greenbriar said it disputes the IRS view and suggested that financial experts who structured the deals might face claims from the company.

Merck (MRK: news, chart, profile) slumped more than 3 percent after the company received a downgrade from CS First Boston to "underperform" from "neutral" due to concerns about weak growth, continuing drug pipeline issues, and valuation. The firm said it expects the drug giant and Dow component to lower its 2004 earnings outlook at some point.

Onyx Software (ONXS: news, chart, profile) dropped more than 10 percent after the company warned of lower-than-expected fourth-quarter revenue and said its CEO and founder will be leaving the company. Onyx expects a fourth-quarter revenue of about $13 million vs. $15.7 million expected by Wall Street in a survey of analysts by Thomson First Call. The company also forecasted a non-GAAP operating loss in the range of $1.3 million for the fourth quarter and said it'll post a non-GAAP operating profit in the first quarter vs. a loss of 18 cents per share expected by Wall Street. CEO Brent Frei will be leaving the company after a decade and a search for a new chief executive has begun.

Michael Baron is a reporter for CBS.MarketWatch.com based in New York.